>> i'm adam. lori: i'm lori rothman, the twitter flash crash, the hash crash, it's been 24 hours, happened this hour yesterday, the tweet that rocked the financial world. the threat to investors, and concerns these technology breaches will be more common. john reid stark ran the fcc's office of interpret enforcement joins us. adam: filing to impress the iphone maker promising to return a hundred billion bucks to shareholders, but it's not enough to prop up the stock. lori: fire works in washington, grilled on furloughs causing flight delays, and house picking

up legislation to make the keystone pipeline happening by going around the president. adam: going for gold, coming up empty handed, the rush to physical gold wiping out the u.s. midnight. how they did it. lori: update you on the market, weak data points starting the session off pointing to softness, perhaps in the second quarter. durable goods orders for the month of march down 5.7% from the previous month, all demand for big ticket items across the board. straight to the floor where nicole is standing by. nicole, major average on track to snap gains. >> that's right. we are seeing the markets down slightly here, lor iring'sdlori as you noted, just slightly. there's been back and forth action, a 75-point range today with the highest points at 14747, but from top to bottom, 75-point range there. all three major averages to the

downside, retailers and drugs pull back, and the dollar is a little bit lower, and as you noticed, the durable goods number comes in and reiterates the fact there's slower growth. >> the gdp coming out later this week, but nicole, i want to keep you here to update you on earnings. apple at the top, but there's two dow components moving the proctor and gamble and boeing, so interested how those battery backfires influenced the quarter for boeing. >> right. so we're watching both the names here because boeing and proctor is a big winner and big loser, and they battle it out as far as how many points they are worth on the dow jones, as far as boeing, the dreamlines didn't hurt the numbers. they backed the full year gyps, beat the street, resume flying the dreamliner and get the deliveries hopefully out next month. ethiopia trying to start this within the week. proctor and gamble, oanders, a lose -- on the other hand, a loser, down

5.25% saying the recovery is choppy, and down beat earnings, that is, for proctor and game -- gamble. lori: thank you. adam: apple shares near the $400 level after the tech giant posted the first year over year profit decline in ten years. apple reported strong demand e and on the conference call, the latest devices will be out in the fall, but ahead of the report, a lot of analysts speculated there's going to be new iphones as early as this summer, and a big concern for wall street is the company's earnings outlook for the quarter which came in below expectations. now, the hack attack is sending markets into a flash dive yesterday. the assoccated press, victim of the cyber attack, a fictitious -weet appeared claiming the president was injured, enough to freak out wall street and cause a brief sell off. liz is on the story joining us now. >> the alleged culprit is the

syria electronic army, thought to have hacked into cbs's 48 hours twitter feed, 60 minutes, also causing disropes -- disruption in cutter twitter feeds. here's a problem for the lawmakers and the fcc. a big chunk of the high frequency trades done by hedge funds, some say up to half the volume daily in the markets basically are using information from places like twitter. in fact, twitter is incorporated into the computer programs, so when you see a fictitious tweet go out, unchecked, you know, essentially, you rock the markets. what we saw yesterday, nearly $137 billion wiped out, and a lot of s&p 500 names in the course of four minutes. it was retraced; right? big names hit, ibm, johnson & johnson, you'll see cisco, home depot, bank of america, boeing, apple, j and j, familiar names like microsoft, all down 11%

dlsh 1% or more. the fcc is investigating, the fbi is investigating, and i've been looking throughout the morning is we're not sure if it's purposeful manipulation to rig markets. the investors would not be hurt, right, because they don't go in and out daily on an descra-day basis, but what i watched and looking for the minis&p 500, future contracts, that spiked dray gnatically in volume, and that's -- we know the hedge fund guys like the e-minito trade, and, boy, it was going around big time. whether or not those are under the probe of the fcc, certainly, the fcc looked at those indexes in the past, and we have not heard from twitter yet, but whether or not twitter puts in an extra layer of protection so those twitter feeds will not get hacked in the future and move the markets on a hair trigger like yesterday. adam: thank you.

lori: thank you. you set us up for the next segment. less than a month after the fcc gave social media to be a blessing, yesterday's hack led to the so-called hash crash. what should be done? there's no one better to ask than the man who started and ran the fcc's office of internet enforcement. john reid stark, currently managing direct of a dital grateful for your time. >> thank you very much. lori: hackings happen every day now. do you think yesterday's attack had a specific goal in mind, or do you think they meant to disrupt the stock market and profit from it? >> it's tough to tell in these situations. i think the bottom line is any time you spread false information over whether, you know, used to be the chat rooms, the message boards, and now it's social media, if you spread false information with the intent to manipulate the market, then you got a a security violation. lori: a lot hurt because they sold at artificially low levels

without knowing what was happening, likewise, a lot of people might have profited because they were able to buy cheaper levels, can the fcc reconcile trades and either penalize or reimburse traders caught up in this? >> well, of course, they can figure out the trading. that's what's going on in the fcc right now. when i was in the division of enforcement, these kinds of things happened all the time. there was somebody spreading false information somewhere online, and there's a trading trail, a money trail, and then, hopefully, an internet protocol trail on lib, and you really track all three of those with really old-fashioned gum shoe work to try to triang giew late to get the person. lori: a step up in complexity considering social media is a viable tool for trading professionals right now. you mix in this, you know, hack of ap, traditional media, with new media, that's new.

what can they do to protect traders and keep it legit? >> absolutely, it's very tough. it's tough for the small investor. suppose there's a limit order if there because you are worried about a stock you owned going down too far, in the three minutes it triggered a sell order and you sold too soon. what the fcc can do? that's a tough question. first and foremost, catch the people doing this and bring them to justice, and secondly, as far as regulation goes, you know, the -- there's all sorts of regulations that say it's a crime to spread false information whether it be online or otherwise. i'm not sure that there needs to be increased regulation. i think it's a good thing that the fcc encourages companies to use social media for december semination. looking back to the way december mages was beforehand filing an 88k, 10k, or the investor went into the fcc website and pulled up that particular document, you know, that was a lot tougher than spreading it over social

media. lori: but doesn't the new avenue of the information, the foreclosure cc gave -- s the fcc gave the blessing to, and doesn't it make information susceptible to manipulation and give critics of the markets overall more juice to say, gosh, it's rigged, a fraud, and the everyday investor doesn't have a shot. >> it's true, an that's why you need vigorous enforcement programs to stop people from spreading false information. you know, it's really -- you've got to adapt, and you've got to use social media as best as can because the important thing is for investors to use information, but the reality is, don't make an investment without doing your homework, wows due diligence, and if you are careful in the inesting and thoughtful about it, then you're not going to base investment on some sort of rumor or otherwise, and if it's a hedge fund that's using program trading or some

sort of algorithm to factor in twitter feeds or whatever other social media they're following, you know, they factor that into the risk because everybody knows that there's potential for rumor within those particular social media. lori: leaving it there. appreciate your insights on this. >> sure, thank you. adam: crude oil rising back above the $90. price futures group is in the pits of the cme, and, phil, a bullish supply report drives prices higher; right? >> it sure is. you know, take it a step furtherment i think it's the return of gasoline demand. that's why oil is up over two bucks just a few minutes ago. what we see right now is gasoline demand at at six-month high to increase the demand for crude in coming weeks, and that's really what's behind this explosive rally, plus, on top of that, a drop in refinery runs when this happened. because of that, when the refineries come back on, they have to make up for that lost

production to meet demand. that means higher demand for crude. gasoline, on the other hand, is not up as much because we're going to see more production. as far as gold right now, look at gulled today. it's still continuing its recovery, up $13.40. the gold market, all the talk on the market is the physical market. people can't get their hands on enough gold, and that's supporting the comeback. back to you, adam. adam: phil flynn of price futures group, thank you very much. lori: get a cup of tea there, under the weather. concerns over the deadly bird flu and why doctors and businesses are worried about this outbreak than previous ones. adam: plus, charles payne makes you money joining us next with the call. lori: ain't nothing like the real thing, the search for physical deal, the real deal, wiping out the u.s. mint. adam: speaking of gold, a look

at today's metal trade. ♪ friday night, buddy.

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adam: breaking news, charles swhab says issues are fixed after a denial of service attacks that started tuesday and extended into today. during that time, customers were unable to place trades, by charles schwab says the website service has been we stored. lori: making cash with charles payne e revisiting irobot that played a roll in the capture of the boston marathon suspects. charles? >> i'll get to that. great pictures, but, yeah, did this on january 2, 6th, and march 12th. you said it was rumba, the home one. it's interesting. they reported last night. i want to put up a table of what we saw because there's another theme that's going on this week in the stock market, and that's

that the domestic economy, america's economy, might be able to do enough heavy lifting, if you will, until the other economies come on board. you can see, look at that domestic home market, up 44% year over year, international up less than 3%. that was absolutely without a doubt phenomenal. i've seen that with other companies that reported this week, and i think that makes a big difference. now, talk about the situation in boston. after that honda was abandoned, they -- the boston police used this irobot to go in there and retrieve things and give the all clear, and you see there's a picture of it right there. it was used in the world trade centers, used in a lot of things, absolutely amazing, and, you know, you worry that the company, people who follow the company, what would they do if they lost defense contracts, well, message how many police departments would love to have that and use something like that? in the meantime, they have a contract from the government for this thing they call the first

look, little machine, little robot like this, throw through a glass window, lands, and, you know, goes in crawl spaces, caves, all of that stuff. bottom line, they raised guidance, the stock looks absolutely phenomenal right here. i think it's got a lot more room to the upside. people should know it was $37 back in january 2012, and think it came down, in part, to defense spending cuts. lori: is the company, then, focusing on defense contracts against the rumba and private interest products? >> working on both angles equally, but it's great to have this balance here, and, again, with defense spending going down, it's great to know, you know, there's a lot of people in the country who could benefit from the local police department having these robots. lori: thank you. >> see ya. adam: back to the new york stock exchange with nicole on the floor of the exchange watching financials, especially citigroup. what do you have for us? >> that's right. we keep a close eye on financials that drive the market one way or another often.

citigroup up, a gain of 1.3%. the annual shareholder meeting is underway. the bank is holding that. the ceo now took over, and he's talking about what they are seeing, the state of the bank is very strong, and also said he would not be satisfied until citi rebuilt credibility with the shareholders and stake holders and expects consolidation in the sector and said the main shrinking of the banks, realm, that's done. back to you. adam: nicole, thank you. lori: talk about not meeting demand. the u.s. mint ran out of the smallest american gold eagle coin after sales of the tiny coins more than doubled from a year ago. the one-tenth of an ounce coin surged as gold futures had a drop in three decades with the u.s. manipulate saying april sales about tripled from a month earlier. they are flocking to purchase the metal after futures sank to

the lowest level in three decades. sales doubled and retail sales tripled. gather that gold, bury it, save it for times of toughness. my backyard is safer than the office here in midtown. adam: all right. lori: where do you hide your valuables? adam: i don't have any. forcing to collect sales taxes? the national retail federation weighs in just ahead. lori: i disagree. the deadly bird flu on the move. the business impact just ahead. adam: look how the dollar is faring against a whole bunch of currencies today. ♪

>> 23 minutes past the hour, i'm heather with your fox news minute. the parents of the boston bombing suspects will both be flying not united states tomorrow. a u.s. team invest gaited last week's bombings is in southern

russia speaking with the parents now. the mother has said her sons, quote, are only guilty of being muslim. losses from the west texas fertilizer plant explosion will likely exceed $100 million. according to the insurance coup sills of tech, a trade group, tomorrow the president and first lady will be in waco to attend a memorial service in baylor for those missing or injured. most of those killed in last week's blast were first responders. river cresting in several mid western states like missouri and illinois. in downtown peoria, the flood waters rising more than 29 feet, and that eclipses a 7 # 0-year record. back to lori and adam. lori: those pictures, thank you. new concerns as the deadly bird flu is spreading now. john roberts has the latest, john? >> well, lori, good afternoon to you. a team from the world health

organization and cdc division wrapped up a trip to china with a stark warning about the potentially deadly virus saying it's a dangerous and disturbing virus, 108 people have been sickened so far. the new count just out now, 23 of the people died, and there was troubling information about a suspected case of human to human transmission. three clusters discovered in china, one involving a father, two sons, a parent, a daughter, another, a husband and wife. they all got the same disease. he's the question. did they get it from each other? might this just be a sporadic case, got it from the same source? they are not should sure at thi. they are monitoring for any indication that this is easily becoming transmissible between humans. that could potentially create a pandemic, and that, dr. joe, says could be a real problem. here he is. >> there's three things that we need for a pandemic. first, a new flu virus we don't

have immunity to. that's the case here. second, we need a virus that infects humans and causes disease. that's the case here. the third component is we need official sustained human to human spread, and we don't have that yet certainly. >> this is why it's a concern. if you look at the benchmark for all flus, the spanish flu, 50 million people died. the case fatality rate was one in 50 people who got sick died. one in 50. the case faye thatty raid with this is one in five. if this gets out and becomes widely contagious, that's real, real trouble. lori: unsettling. how close, john, are doctors to coming up with a vaccine? reports, right, it could be drug resis tent. where are we? >> racing to try to create a vaccine, working up vaccines, making progress, but the problem is they don't know how effective it will be, and vaccines are

months away. to the idea of resistance, h7n9 is resistant to the early antivirals like, and the cdc has a sample of the viruscepstive to the new virals tamiflu that worked against it, but there's another sample which shows troubling signs. here's mike shaw from the cdc labs. >> may be a small part of it that looks like it was trying to become drug resistant, but wasn't quite there yet, which shows us that the potential is there of something we have to be alert for. >> they are on the alert for that already. one case of this detected outside of china in taiwan, a man who spent time traveling in eastern china. here's the worrisome part, he didn't have any contact with birds. >> thank you, john roberts. we thought it would be interesting to look at companies within industries that could be impacted by the bird flu. let's show you some of those.

we have the chicken producers, of course, tyson foods, interesting, higher in today's trading, pilgrim pride, standardson farms, a pop of 4%. adam: look at yum, beat earnings, missed revenue slightly, and it's so big in china. china sales down 20% because of bird flu issues, and yet they are popping today up almost 8% today. lori: this in an otherwise down market. interesting reaction. that was an unsettling report from john. no vaccines and so far drug resistant and person to person contact too. we'll watch that. adam: keeping you informed on it, and informing you too, on sequestering and the faa because the man in charge of the faa is grilled on capitol hill about the airline delays, what washington wants to do to get the airlines back on time. lori: bypassing the president, the house takes up a plan to move forward on the keystone pipeline without presidential

approval. adam: take a look at who is up and downright now on the dow. ♪ blpg ♪

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adam: we'll check stocks again as we do every 15 minutes on the floor of the new york stock exchange. we find nicole petallides. what are you watching right now? fedex? >> i'm taking a look here at fedex. it is a winner up 1 1/2%. they got a big contract from the u.s. postal service. so taking a look at it right now, 94.63. it is up 1 1/2% of the as i noted u.s. postal service put this out for bid. they were competing against ups but fedex won out.

what is interested valued, $10.5 billion for this contract which starts in october, when i look at the chart long term, big dip in 11, big jump in march. adam: hopefully they get paid up front. nicole petallides. thanks very much. lori: a big day on the hill. house grilling faa administrator michael ware tau on the furloughs. let's begin with rich. congressman fired up over the faa furloughs. >> they are. republicans say the faa could save the money elsewhere in the $16 billion budget. the faa says that is not the case, they don't have the authority to do that. another fight in this hearing, involving timing when the faa unveiled plans, really only doing so last week. >> well you've had this under consideration, as you said, for several months but you waited until hours

before it was to be placed into effect to tell the relevant stakeholders. i find that shocking. a shocking lapse of manament. would you comment on that? >> we built detailed schedules within each of these facilities and we this information with the airlines as we had it. >> and that was few hours before it went into effect? but you've been doing this for months. why couldn't you brought them in earlier so they can make their plans. >> talking about general impacts. >> general impacts again. they knew the general impacts. >> but we've been talking about reduction in available controller hours of 10% for months. >> you but didn't tell them which airports, which airlines? >> we told them they should expect significant impacts at major hub facilities. >> latida. everyone knew that. >> the faa says the

furloughs delayed 1000 flights yesterday. look what we're looking at right now. flight delays in san francisco, 30 to 45 minutes. newark, less than 15. philadelphia, less than 15 minutes. there are the a few efforts on cab toll hill to replace the cuts. some using war funding that is unspent. some using airport or corporate jet loophole the democrats have been talking about for a while. none really gained much traction on capitol hill as the issue continues in washington. back to you. adam: rich edson thanks very much. a lot of people dealing with has sills from the faa peter barnes, a house committee is allowing the keystone pipeline to move forward without president obama's approval. what is that all about? >> adam, the house natural resources committee is votings on legislation right now as we are speaking. it would simply strip the president of his power to approve or deny the keystone pipeline and allow it to go go forward today. interestingly, the house

republicans, a republicans are allied with labor unions on this because labor unions are support the bill for all of the jobs that it would create, as many as 42,000 new jobs according to one estimate. the unions held a ral i on this today. take a listen. >> our president, the president of the united states has taken his time. they have done thorough reviews. all the evidence is in. it's now time to make the decision to issue the final permit to put thousands of building trades members to work and back to work. >> now while this was going on republicans and democrats were battling over just how many jobs the keystone pipeline would create. we heard at the, at the committee, republican doug lamborn battling with democrat carol shea-porter of new hampshire. take a listen. >> okay, let's say it is 4,000, say 2,000. state department, our country's state department

says 42,000. whatever it is. those are jobs we don't have today. doesn't that mean anything? >> yes. i think we should pass a jobs bill so we have jobs that stay here and -- >> i can explain until i'm blue in the face but i'm afraid you're not really listening. >> we have a difference here. >> not sure about the republican strategy on this legislation, lori and adam because the president has to sign it as i recall, right? lori: minor detail. >> i don't think he is gonna. adam: it is weird the president some days he seems to be for it or against it. if he is for it doesn't want to ink aer environmentalists he would let the legislation go through and win. >> the idea would be i think to attach it to some other must-pass piece of legislation like, increase in the debt ceiling later this summer? i wonder? lori: clever, all strategy.

adam: peter barnes, thank you very much. lori: politics as usual. adam: the nation's big banks are fighting a daily battle with hackers. charlie gasparino is up next with exclusive new details on those efforts. lori: more on the tweet that rocked the financial word floor. adam: a look at 10 and 30-year treasurys. i'm telling you right now, the girl back at home

would absolutely not have taken a zip line in the jungle. i'm really gd that girl stayed at home. vo: expedia helps 30 million travelers a month find what they're looking for. one traveler at a time. expedi find yours.

>> i'm cheryl casone with your fox business brief. senate confirmation vote of the president's nominee for labor secretary has been delayed. the vote to confirm thomas perez was scheduled for tomorrow but will now be delayed so senators hear testimony a witness in contentious whistle-blower case. tom harkin says he doesn't believe the testimony will be a problem for perez's confirmation. >> shares of buckeye technologies are soaring on news of a buyout. paper products maker georgia pacific is buying the company for 1 1/2 billion dollars that includes debt. wal-mart has dibs on the premier screenings for the next superman movie. the ticket foreman of steel will be at 3700 wal-mart stores on may 18th. that is the latest from the fox business network, giving you the power to prosper.

adam: the cyber threat, citigroup's ceo's warning at today's shareholder meeting that cyber attacks pose a quote, and this is the quote, real significant threat. charlie gasparino first reported yesterday banks are facing daily attacks. he is here with exclusive details. everyone denies it. people know they're happening. security people are under attack. lori: what we do know is this i've been doing survey of banks, jpmorgan and head of citigroup was talking about it today. what we reported and these attacks are daily. they're massive. there are hundreds of thousands of potential hackers trying to go into the system and what they're doing essentially is trying to disrupt online banking possibly disrupt firewalls

they get at customer accounts. we do know, u.s. banks are pretty sophisticated, they have hired, this would be another great follow-up story. how much money have they spent on this stuff. over the last, from what i understand, three or four years they have spent countless, probably billions on this, basically to creating sort of firewalls with that protect customer assets, protect the trading desks and stuff like that. on top of that, try to keep the online banking, when you go online to do checking and saving, keep that in some sort of a stable mode. it is very difficult. as you know, every day there is outage. here is what it is kind of interesting, so the banks are clearly working, are from what we understand, not clearly. i tell you i know this, sources at banks are telling fox business network they're working with state department and treasury on it. what they're getting back from both places source is likely iran. a lot of people think it is china. a lot of people think it is north korea. they believe the source is iran and it is part of a terrorist attack. it is cyberterrorism.

adam: is anyone from your sources at the treasury department or defense department talking about kazan and iran sponsoring that group? they're the ones that take credit? >> that's a good point. i have not asked that level of detail. i point out this is mostly state and treasury as opposed to defense and treasury. state for obvious reasons between two countries and what is interesting about it though, is that, if you notice banks have been quiet about this lately. mike brought it up. he might have brought it up from a question posed by an analyst based on some of our reporting yesterday. that is interesting. you can listen to "dow jones newswire" today to get some of this, but if you had watched the fox business network you would have gotten all this yesterday and this is an issue. they don't want to keep bringing it up. apparently in iran, these sort of cord plated attacks. they have been told that the

sources of these attacks get bonuses, monetary inducements to create publicity here when it is mentioned. maybe i'm putting some money in someone's pocket over there, but when you mention it, when mike corvat it, there is issue people at the other end are getting induced. that is the whole thing create publicity, what is the endgame it they're not getting in customer accounts and combine with the flash crash yesterday. >> it was interesting, there are two separate thoughts here. maybe it is terrorism related. maybe it is insider trading related. i think it is terrorism as opposed to insider trading. there is some talk in the journal about an investigation of insider trading on this. the minute anything like this happens, both finra, and basically the new york stock exchange, and these sort of self-regulatory market players, they look at the

insider potential for insider trading. they have very sophisticated computer programs could see people buying en masse before that. it is a given. they look at that the endgame is this. one of the tragedies of 9/11, the big tragedy was the loss of human life and what it did to downtown manhattan and psyche of the country. i would have been there, i missed it by minutes. i was at a doctor's appointment. i used to work across the street at "wall street journal" i know people who died in that. it was a terrible tragedy from that standpoint but it was an economic tragedy as well. people forget that shut down the markets almost a week. commerce in a lot of respects not to complete halt but pretty close to one. lori: right. >> the economic impact of terrorism is huge and that's why they're doing this to the banks. there are seven banks. they're all consolidated, basically here. one in l.a.. adam: 80% of the deposits. >> think about that you shut them down all at once

prevent people doing business, achieve a goal a terrorist might want to achieve. adam: charlie gasparino, still ahead of "the wall street journal" and "new york times" as always. thank you very much. >> thank you. adam: we have breaking news. the white house is weighing in on the faa furlough controversy. the white house says if lawmakers propose changes in budget cuts to address problems caused at the faa, it would be willing to look at it but it would, and this is the quote, be a bandaid approach. now this comes after faa administrator michael ware tau testified on cap -- capitol hill on that very subject. lori: ben, it is 24 hours exactly about the mini flash crash. where are we a day later? what have we learned at this point? >> outside world realizes

algorithmic trading is. computers picking update at that feeds supplied by dow jones. supplied by reuters that send to a computer an electronic message that is read only by the computer at about 250,000 words a second. and those, and they automatically respond with a trade in kind. in this case. there was a negative trade or the algorithms involved also backed away. so people are starting to learn a little bit more about the high frequency trading side. algorthymic trading side. the as a matter of fact, high frequency traders do not add liquidity to a market. lori: ben willis, we have to avlee it there. we have a lot of breaking news this hour. appreciate your time nonetheless. thank you very much. >> talk about leveling the playing field and not burdening america's small businesses. senate is moving closer to national internet sales tax. the national retail federation says it is about time. the organization as vice president david french will explain his position when he joins us next. lori: you always have

winners and losers. that is what makes a market. you have a nice pop for broadcom, seeing shares up 7% at the moment. we're right back after this.

adam: the senate is moving closer to a deal allowing states to collect sales taxes from online retailers. critics argue it could hurt consumers and is really just another tax hike. but our next guest disagrees saying it is merely a collection issue. david french is the senior vice president for government relations at the national retail federation. good to see you, david, thanks for joining you. >> thanks for having me, adam? >> explain to me a lot of

viewers would agree that they're surprised the national retail federation would be in favor of it? why are you in favor of it. would seem to hurt businesses that sell online but consumers are buying from them. >> local businesses have want ad level playing field for a long time. they collect sales taxes on the very first dollar of sales and they pay those, they turn those tax dollars over to states and local, local communities, to fund things like firefighters and police and teachers and so on. they don't think it is fair they have to compete with online sellers, with one hand tied behind their back because online retailer can offer a lower price just because they don't have to collect a sales tax. adam: brick-and-mortar shops are paying a sales tack that their online competition does not have to pay. but why cap, if i understand the legislation, if you're an online retailer with less than a million dollars in sales you still won't have to pay sales tax. you're still giving advantage to the online retailer that the brick-and-mortar does not

get? why cap it, why not get it rid of it as all together? >> we support a low as number as possible. this is political decision. i think members of the senate and the house agreed that a million dollars was appropriate threshold. so we support, we support the level they set. adam: so i'm going to cite a city i used to live and love, cleveland, ohio. cuyahoga county. sales tax across the board. there is 10,000 different tax enties or and taxing units within this country. how do the small business figure out to comply with a law they might have to send sales tax revenue to chief lapped, cuyahoga county, state of ohio? it sounds incredibly complicated and incredibly expensive for that business? >> that talking point comes out of 1992 supreme court decision points out complexity with dealing with all the different tax jurisdictions. in 20th century there is app

for that. we think technology can solve most of the problems efficiently and quickly. most online marketplaces like ebay already serve to collect sales tax from their local small, their small sellers online. adam: but ebay is ale opposed to legislation. they want the cap raised to $10 million in sales annually. i'm curious. anyone ever said how much it would cost a business, let's say around 900,000 in revenue to comply or buy the app or get software that would allow them to be compliant? >> most recent study i saw from 2006. technology is solving those problems and we don't think the cost numbers from 2006 are accurate today. generally speaking the cost of collection is very low, maybe one or 2% of the total collected. adam: one or 2% of the total collected. is there a dollar figure real quick? as we wrap up i think it would help put into perspective what small

businesses will face. >> i don't have that figure off the top of my head. adam: david french, national retail federation, looks like a lot an issue a lot of people will be talking about and a lot of us will be paying for. lori: sam stovall, shares his stratfor keeping your money safe amid this volatile climate. he joins my colleagues, tracy byrnes and ashley webster here on fox business. here they come. don't miss it.

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for sein a whole new way. for seeing what cash is coming in and going out... so you can understand every angle of your cash flow- last week, this month, and even next year. for seeing your business's cash flow like never before, introducing cash flow insight powered by pnc cfo. a suite of online tools that lets you turn insight into action. can ashley: welcome back, everybody, i'm ashley webster. tracy: tracy byrnes. three days up and now caution. the dow is down 22 points. it gained nearly 200 points the last three sessions is it time to sell in may and to away? s&p's sam stovall says not exactly. he shares the twist on the old saying in moments. ashley: no love for apple. a slew of analysts cutting their price target on the stock. is wall street demanding too much from cupertino?

we'll talk with one investor that says this stock is bbing punished for no good reason. that story is coming up. tracy: that is what my son says every day. faa chief is suspending furloughs that could stop flight delays for weeks. he says it is a case of the white house failing to lead. he is here next. ashley: let's go to nicole petallides on the floor of the new york stock exchange, the dow is on track to snap a three-day winning street but there's aways to go. >> that last week we had a tough day on wall street. biggest percentage loss in this year of 2013. we were watching the dow bouncing back. it gained three days in a row. right now this is looking like a down arrow right now at the moment. but it is a mixed market and only 2:00. we certainly have a lot of action to follow over the next couple hours. dow is down .1 of one

percent and the s&p 500 is up .1 of 1%. proctor & gamble, at&t, yum! brands, and so much news is coming out which brings me to boeing. let's look what is going on here. you look at boeing 3 1/2%. adding 22 dow positive points. it is helping the dow to keep near the unchanged line without boeing they would be doing a lot worse. they came out with numbers that beat the street. their outlook they reaffirmed guidance and plan to get the 787 dreamliners out after all. a food day for boeing. back to you. ashley: battery problems? what battery problems. nicole, thanks very much. tracy: so sell in may, go away? i don't know. our first guest says that might not be the best strategy this year. sam stovall, s&p capital chief equity strategist joins us now. sam, first of all, why does this happen every year? every year, like clockwork you could have create ad

portfolio around it. sell in may, take the summer off. go to the hamptons, come back in the fall and start buying again? >> is that an invitation to come to the hamptons? tracy: you got it. >> i think basically it is a matter of capital inflows. you're absolutely right since world war ii the market risen average of 7% from november to april but only 1.2% from may through october. i think a lot of money comes in as pension plans add to their holdings earlier in the year. if you have a bonus you end up getting paid by march, maxing out your 401(k). you've got to invest in your ira before april 15th. if you get money back from uncle sam you do so early. so a lot of money already has come into the market by the time end of april rolls around. tracy: that is great point. what we've been talking about here i guess the big difference that uncle ben has fink are on trigger and money keeps coming right? >> it sure does. also we had a very good indication earlier in the year. january and february. you were up for the market.

historically that is very positive with an average 12-month total return being 24%, since world war ii. it adds to a little support to the may through october period as well. tracy: what would you do instead? i know you would not get out of this market all together? >> that's right. i actually found that if you gravitate toward the defensive sectors within the s&p, such as consume every staples, meaning, food, beverage, tobacco as well as health care from may through october and back in the market from november through april, you would have added four percentage points per year, instead of getting 7%, you would have gotten 11% since 1990 with lower volatility. of course there is no guaranty that will happen going forward. but i think like whitewater rafting. you let the market take you where it wants to go. in the summer it wants to go nowhere. tracy: if that is the case then, with the whitewater rafting analogy. why not float away on an s&p

index fund and be done with it? >> well you could. you could leave it in the s&p 500. get that 1.2% return on average. which happens to be better than what you would get in a money market fund. but actually instead of getting only 1%, since 1990, health care and staples averaged 4.4%, an 4.6% respectively. so you ended up getting more than four times the return with those two sectors than you did with the market. tracy: that's fair. tell us how to do this rotation. you're saying try to do this before may 1st? when am i out of it and back into more riskier equities? >> come the end of april, beginning of may you would want to sell spy, which is the s&p 500 etf and buy equal amounts of xlv, which is the health care index and xlp which is the consumer staples index. hold that until the end of october, when you would sell both xlp, xlv and buy back

into spy. so, it's really just a simple six-month rotation. tracy: it is a simple trade. for four% you can buy yourself a hampton's house, sam stovall. thank you so much for sharing that with us. >> my pleasure, tracy. tracy: nice little trade. ashley: not bad. very latest on the fake tweet that crashed the market. associated press's twitter account is back up and running. more than 24 hours after it was hacked. liz macdonald joining us with the very latest on this story, liz. >> iting interesting. ap twitter feed right now there is questions being asked of ap, are you going to do anything to better protect your twitter feed and stop. tracy: right. >> retracting and removing these false statements that were put up? listen that was really bad what happened yesterday. nearly $137 billion in market cap wiped out of s&p 500 companies. what we're talking about are big names got hit. johnson & johnson, ibm.

cisco, bank of america, wal-mart, all of the companies that fell down in trading, 1% or more, so what we're waiting to here is this, from sec. the sec has already said to companies, you may disclose information on your twitter feeds or other social media feeds. you need to do better to protect the twitter accounts from being hacked because twitter accounts are routinely hacked. this perpetrator allegedly syrian electronic army. they are taking responsibility. they have, been disruptive in places like qatar. they allegedly hacked into cb of the s, "60 minutes". ashley: bbc. >> npr. the name of the game, here's the problem. these were computer driven trades. the computer driven trades incorporate twitter feeds. they try to grant all sorts of information. twitter is getting hacked those computer high frequency trade are going to do a cascading ripple effect.

other thing we have to talk about quickly, we know the markets are hair trigger ready, so hardwired to news flow. when you have the estimated one half of the daily volume on certain days comes from high frequency trading. that is a big deal. if you have a bad twitter feed moving markets watch out. haven't heard from the sec what they're going to do about this. the other issue, what we're looking at is the e-mini s&p 500 futures contracts. that is the where the hedge funds, that is their playground. that's where they make a the are of their trades. we saw hot action, there it is right there. you will see $2 billion spike in volume. hedge fund like the e-mini because it is not an open cry system that the s&p 500 is. ashley: right. >> what hedge fund like to do with computer trades here. we saw hot action in u.s. dollar and japanese yen trade. not just the dow and s&p. this gyrated market.

we're waiting to hear from the sec what they will do with twitter and do more to protect your account and twitter will boost its credibility by saying we will have authentic layers of protection on the feed. ashley: a simple two-step authentication to log in, people have been crying for, i guess from what i heard, twitter is hiring software engineers now and other people to actually --. tracy: it is about time. ashley: a little late, isn't it? >> yeah. exactly people are losing their money. treated like inconvenience at places like twitter. it should be about protecting investor and little guy and other vest, to. sec says you companies can use twitter. tracy: right, right. ashley: emac, thanks so much. >> sure, delighted. ashley: good stuff. tracy: now we have this, the fa at chief is taking heat on capitol hill why flight delays. why he said they are just unavoidable. that's next. ashley: apple shares on a wild ride after less than stellar results. one investor tells us why he is still buying the stock.

he says come on, it is still a good deal. he will be coming up. time to check how oil, gold and other metals are trading. the dow is essentially flat on the day. oil is up, as you can see 2 1/2%. 91.41 a barrel. big day for the oil sector. metals as well recovering after getting hammered earlier on in the week all showing green arrows. we'll be right back. ♪

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where queen mattresses start at just $699. sleep number. comfort. individualized. to find your store, visit sleep number.com. ashley: the faa administrator is answering tough questions on capitol hill today after several days of airport delays caused by furloughed air report controllers. rich edson with the latest from capitol hill. rich? >> hello, ashley. the biggest point republicans and democrats are fighting for furloughs the republicans claim the faa has authority to save $200 million through somewhere else in their $16 billion budget. faa and administration claim that is not true. they got into other issues

here as well especially safety on this. and the faa is saying that the consequences from this are largely convenes. >> can you assure the american people that what you're doing will have no effect on safety? >> it will have no effect on safety but what will suffer will be efficiency. >> here are the efficiency consequences we're seeing across the nation right now. the faa claims that 1,000 flights were delayed yesterday as part, because of the furloughs that they're forcing their air traffic controllers to take. right now in san francisco, delays of 30 to 45 minutes. in newark, delays of less than 15 minutes. in philadelphia, delays of less than 15 minutes. there is also some discussion how exactly congress can address these cuts and make sure the faa fully staffs air traffic control towers. one idea endorsed by the white house, floated by senate majority leader harry reid would use war savings, savings won't be spent, money not spent in iraq and afghanistan and apply that to the faa budget to avoid cuts. the problem there that

republicans say there is budget gimmick. there are no savings there. they are opposed to it. some ideas the democrats brought up is closing corporate jet tax loophole, to pay for it something republicans would be against because they want to use reduction ins tax reform proposal. this would give the faa and department of transportation to move money around. that is something that would gain momentum on capitol hill. the only idea that has bipartisan support so far. ashley: rich edson on capitol hill, thank you very much. coming up we'll talk to congressman charlie dent who actually questioned faa administrator michael huerta. we'll get it from the horse's mouth and what his take was on that. moving money around, that is all it takes. it is just a shell game. tracy: we don't do that every day, right? let's make money. charles payne is looking at retailer zumiez. the stock is up 41%

year-to-date. charles, thank the teeny boppers. ashley: thanks their parents. >> exactly. there you go. i think we talked about this before. they do skateboard and snowboard and stuff. tracy: yeah. >> one of these stores they would do so much better if they taught the kids that work there how to work. that is different story. last time they had four registers but three of the people behind the counter, one register trying to figure out how to operate it. the line was out the door. sooner or later that stuff comes back to haunt you. meantime time week ago same store sales came out up 8%. we might be a at reflection point. i like earnings estimates by the street, when think start to ratchet them up almost every two weeks usually they're behind the ball. it tells you they feel, golly this company will do better than we like. that is one of the signals, same-store sales. there is 25% short position on this thing. next time they report if it's a good number there could be a gigantic short

squeeze on this. another thing i like. that chart is freight looking chart. making higher high lows and higher highs. break out from 29 virtually a free shot to 33 to 35. ashley: are they across the country, charles? >> they're across the country. they're in most malls. they are, a stores. you need 70% of the your body covered in tatoos to qualify for a job. don't go in there filling out application. tracy: long bang haircut. i want to cut their hair off. >> marilyn manson. ashley: no scissors allowed in the store. tracy: you think this is a sign of the consumer overall or is it a one-off? >> the consumer has been a lot more resolved than we thought. i think we're in environment where people are actually spending money rather than saving it because they don't believe in the future as much as they did. a what at lot of people don't realize disposable income is highest spent in 19 years. we took 1.3 trillion dollars out of household debt. not voluntarily.

so we don't have house payment anymore. after the check is done we do have more money. often it goes towards the kids who are going through that phase. ashley: long hair phase and tattoos. tracy: haircuts. >> tatoo removals. ashley: appreciate it. just a little quarter past the hour time to check again on these markets. nicole petallides at nyse. nicole, popular food and drink companies out with earnings today. >> we'll take the opportunity to take a look at some of these names really household names for that matter. panera bread which actually hit an all-time high recently, now is pulling back. you could see it is down 2.25%. their earnings for the quarter did miss analyst estimates. as a result you could see us down about 4 bucks. let's take a look here at yum! brands. yum brand the parent of kfc, taco bell, pizza hut. the key story is over in china. concerns about bird flu was an issue. chicken and the like. there were worries it would hit revenue. they did better than eepected up 7.6%.

dr. pepper, snapple, parent of sunkist, 7-up, apple juice. coming out with good quarter. shares are hitting all-time high. they had productivity improvement. 10 calorie drinks helped them along and as you see that is winner. back to you. ashley: nicole, thank you very much. we'll be back with you in 15 minutes. tracy: everyone is still digesting apple's earnings report. the stock on a total roller coaster ride after results. it was up and it was down after ceo tim cook opened his mouth. the new plan to return billions of dollars was also announced. we have a fund manager here to tell us why he is still buying the stock. ashley: as we head to break let's see how the u.s. dollar is moving right now. getting more expensive for tracy's european trip coming up in the near future. tracy: no. ashley: euro is up against the dollar. so is the pound. certainly a mixed bag as you can see. we'll be right back.

tracy: we have breaking news. the treasury department announcing 3 1/2 bol billion in what it calls new markets tax credit awards. this isto revitalize low-income and dishe is interested communities. the treasury says the program builds on the obama administration's commitment

to increased economic opportunity in distressed areas of the united states. again, $3.5 billion in new credits from the treasury department. apparently treasury will provide 85 different organizations the ability to make tax creditorizations. i'm dumfounded, ash. ashley: sounds like detroit could use something like that, low income communities. tracy: or does it work? ashley: that's true. we'll see. all right, shares of apple slightly higher now after the tech giant reported its first quarterly profit drop in a decade. also announcing a plan to return 100 billion in capitol to shareholders? wow, the biggest ever single buyback program ever announced. our next guest said if this were any other stock investors would be flocking to it. we have the portfolio manager of got mg beta fund which has apple as a major holding. oliver, thank you so much for being here. what did you make of the quarter? the company beats the earnings forecast.

doubles amount of cash returned to shareholders. outlook fall below expectations. profit decline first time in decade. >> there were no major surprises in the outlook. everybody is looking at margin compression. we're all talking about a slowdown in earnings growth which is typically and normal for a maturing company which is what is happening to apple over the last few years, but if you take away the name apple as you point out and look at the fact they're growing at a very rapid rate, they're beating the s&p growth rate five-fold and then some, increasing cash on hand, increasing their dividend, increasing their buyback, everything they're doing is what an investor wants to do. as portfolio manager, we recognize the fact, this isn't just about apple but other securities as well a patient investor does get rewarded. i'm reminded what warren buffett said in one of his books, basically saying he was sold out of company every time he was told to because it was down, his returns would half as much as they are today. ashley: which we were talking before in the

commercial break perhaps this was a bubble ready to burst. the expectations become unrealistic you about one thing steve jobs was able to do get the attention on the products, create the cool factor. where we are though, debating stock price and where inner-workings of the financial side of the business, something that tim cook hasn't been able to do is shift the, you know the focus back to the products. >> i think that is apple's biggest problem. they need to hire a new communication team if i were to advise them on anything. they're executing on the plan and doing quite well from a pure business perspective. if you listen to yesterday's call or any viewership on fox business news read some excepts this is big difference in not lanning or launching proulths toward the fall between the difference we're launching significant products in the next six months. completely same timeline but doesn't sound as problem. there is communication problem. there is a problem as we talk about a little bit of bubble exceeding expectations was obviously

difficult. ashley: yeah. >> the stock was run up too high, talking about $1,000 and $1200s you couldn't get enough analysts to top each other where the so being would be in a week now the opposite is happening. ashley: if you're an investor you have three-to-five year outlook an accept volatility and returns come from parish sense patience, that is hard for people to understand. this stock will grow in 70% terms of it earnings over next three to five years compared to the s&p that will grow at six 1/2%, that is pretty attractive. ashley: we talked about products. what do you think apple mass to do? they talked about a cheaper version perhaps for the chinese market? they go for a bigger screen to compete against samsung a lot of people like, android? >> i think that, two answers there. ashley: yeah. >> the iphone and ipod were disruptive technologies in the leisure environment. it will be very difficult to replicate that. i don't know if going downstream is it necessarily the answer. that is outside of my

wheelhouse. i'm not a technical product specialist but what they clearly need to do is figure out, i think back to what steve jobs did when he returned to apple initially. ashley: yeah. >> he shrunk the skus from 24 down to 10. i think that it is getting to the point where apple is starting to get a little bit too much product and here's a s version of the same thing. here is lighter version and smaller version. ashley: yep. >> gets very confusing and muddled in the marketplace where people don't have direction and opens up the door for competition to come out. we're doing this product better than them. that is what happened with samsung on the smartphone market. i think they maybe need to pare that back. from an investor perspective --. ashley: this is decent entry point right now? >> wonderful entry point as long as you're willing to be patient. i'm not saying it can't go down here in the short term. i'm saying intrinsic value in the stock next three to five years is significantly higher than year. if you're expectation is 8% return on equities next three to five years, apple

ought to be beating that. ashley: very interesting. created their own legend and they're suffering under the weight. >> it is tough. ashley: it is a tough deal. oliver, thank you so much. >> thank you so much. ashley: appreciate it. great stuff. tracy: yeah, that is good stuff. coming up we'll have much more on the faa chief grilling on capitol hill about those furloughs and flight delays. congressman charlie dent took part in the questioning. he is our special guest next. ashley: tobacco stocks on fire. someone had to say it as cigarette-makers boost profits despite weaker demand. we'll look at which stocks are best poised to rise straight ahead of the as we head to the break, look at some of the day's winners and losers on the s&p. we'll be right back.

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♪ 90 minutes to the close, the dow 30, almost seemingly split between gainers and declining. microsoft up over a buck today, but at&t down more than $2. nicole at the new york stock exchange with the latest. nicole? >> an interesting story, ashley, whirlpool, two stories combined into one. look at the stock. it's hid pretty hard today, down 2%, was down more than that. it has recovered some of the losses. this stock, though, is not too far off the all-time high of 122.39. there were numbers that beat the street, maytag, cut costs, price increases, all good news for whirlpool, but durable goods numbers came in weak taking them down along with this. as far as the major market averages, down arrow for the

dow, and nasdaq down. mixed market at the moment. ashley: a see if there's a lot of action in the last hour. thank you. >> more now on the battle over faa furloughs and flight delays. house committee drilling the chief accusing the agency of using the sequester as a scapegoat for the delays. republican congressman of pennsylvania is on the panel and joins us now. congressman, so glad you are with us. i have to mention up front that we have a lot in common here. the furloughs, flight delays, i've been traveling for as many years as i've been alive, and there's delays. what are they talking about? >> well, first, thank you for having me on the show. well, first, we had administrator in front of the subcommittee this morning, and it was clear to me that failure here is there was no notification. the faa blind sided various stake holders, blind sided the

airlines, the airports, the unions, and most important of all, they blind sided the american traveling public. this is really outrageous how it's handled, a great sign of terrible mismanagement to misnotification is the issue. there's flexibility in moving money, but the administrator didn't ask for additional flexibility to deal with the furloughs. >> that's the thing; right? is it a manufactured crisis, doing it on purpose for good pr for the president and crying congressmen that you work with? >> well, it seems that it was in fact, purposeful. with respect to the faa contrac@ control towers, what the faa did, they sat down with the department of homeland security and the pentagon with the stake holders to help them prepare for it. did did not happen here with respect to the air traffic control furloughs. it's clear if we're going to learn about the cuts via white

house press release, and that is simply unacceptable. we should be managed better. p >> to your point, other agencies have discretion; right? have they not asked -- they probably would have received the same. they spent 500 million on consultants, maybe necessary, but we could have probably found other ways to do this. just go to the cafeteria for the day. >> a 4% cut, talking about, what, 40% of flights delayed. what's more troubling is when the directer was confronted about how about deferring some of these expenditures for long term projects and releasing the funds for immediate or short term needs like making sure that we have aircraft controllers available to help with the immediate issue, he didn't have an answer and didn't respond, and, again, when confronted, asked mr. add min straiter, did you want flexibility? did you ask? he said no, why would he? it's a failure of leadership and

management for sure. >> that's indeem i -- endemic of the entire administration. shoot now, ask later. we make big headlines, you know, taking money out of poor grandma's hands, and then we have to worry about the consequences of it all later. >> well, we've known about the sequester. they knew about the sequester for a year. they had plenty of time to plan for it, but it was, really, again, so startling, is no one was notified about the specifics of the sequester and the impact on the faa and air traffic control until last week, again, blind sided. airports, airlines, the unions, the workers, and the air traveling public. as we deal with other cuts, we're going to deal with the same situation where we get a press release from the white house telling us the specifics and maximizing the destruction of the american public so they advance bigger government agenda. we passed on two separate

occasions legislation to replace these sequester was better balanced cuts, but, of course, the senate never acted. >> hopefully, the hearing prevents that from going forward. thank you for taking time to be with us my fellow grad. >> thank you, tracy, great to be with you, thanks so much. ashley: breaking news, oil closing up at two dollars and a quarter at 91.43 a girl, a gain of 2.5%. ashley: the second it's down, it goes back up. coming up, a new warning about a dangerous strap of bird flu hitting china. why global health officials are growing more concerned. tracy: let's check the 10-and 30-year treasury. right now, down one basis point on the 10-year and 30-year as well. we'll be right back.

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♪ lori: this is your fox business brief. the senate confirmation vote of the president's nominee for labor secretary's been delayed. the vote to confirm thomas perez was scheduled for tomorrow, but will be delayed to senators hear the testimony of a witness in a

contentious whistle blower case. dell sold its stake in the company, sold 24.5 million shares of 1.4% of dell's outstanding share after the blackstone group pulled the plug for a potential bid. toyota, the top auto maker, but the race is tight selling more than 2.# # # million outpacing gm. that is the latest from the fox business network giving you the power to prosper. ♪

ashley: a new strain of bird flu, one of the most lethal viruses killing 22 people, infected a hundred others since it was first detected last month. joining me with the medical

dollars report is fox news health managing editor. doctor, thank you so much for being here. what makes this so particularly dangerous? >> well, it's lethal, but not deadly. the h5n1 was more deadly because it infected 600 people, 371 people died. the mortality rate is not as bad; however, the combination of the virus seems to be highly infectious, makes people very, very, very sick. that's why it's called "very lethal." now, a lot of facts are out there that we stilt don't understand. number one, we don't understand how people get infected. of course, the assumption is it's a bird flu somehow obtained by poultry because there's a slow down in the spread of the flu in places where they shut down, you know, like the farmer's market with all the animals. certainly, something about that that creates the transmission.

there's been no evidence as to date there's human-to-human transmission, which is good; however, one says the virus has scaped china now and is in taiwan, one infected individual in taiwan documented with the h7n9 variant of the flu we're talking about, so the cdc now is very quickly developing vaccine for it. they are not quite there yet. they are a few months out, and the who, the world health organization, is really monitoring, again, the statistics, the spread, and now that it is out of china, whether or not we're going to see it in other parts of the world. ashley: even though there's no evidence of human-to-human passing it one to the other, but the virus mutate, can't they? >> that's the whole issue with the bird flu. right now, when the first bird flu came out, documented human, you know, humans infected, the argument is, oh, my god, is this

going to obtain a human variant to it so you get transmission human to human. that's been a fear that this is something that could happen, so as we look at these different variants, the h1 n1, the h7n9, somehow this is the fear of many world scientists that somehow these types of bird flu are going to mutate and become almost like human viruses, if you will -- ashley: how can you stop the spread with people traveling to china more these days than they@ used to. it must be difficult. >> it's difficult. infectious disease issues are really the epidemic of the world. i mean, a lot of the things -- whether you are talking about the amount of people getting sick worldwide from e. coli, salmonella, ingestion of a lot of food, the viruses popping up, our immune system compromised because of modern society, you know, you brew a perfect storm,

and, again, even to this day, people are resilient in taking vaccines so when we tell them take the routine flu vaccine for, there's a reason for it. hopefully science is on top of this. ashley: thank you so much. thank you for bringing us up to speed, appreciate it. quarter till, time for stocks now as we do every 15 minutes. ben willis, thank you so much, mr. willis. it's a huge week for earnings, and they've been okay. in some cases, very good; in other cases, not so good. the guidance is not great. what are you hearing on the floor? >> well, you're right to the point. it's been the guidance, and apple is a great example of what the market was expecting. they were below numbers when they came out, but the fact they boosted dividend, stock buyback, yet not enough to hold the stock up. you have the other stocks throughout this morning, again, disappointing, putting weight on

the market place, but, yet, here we are, starting the dow only slightly to the downside, the s&p and the nasdaq are on the plus side right now, and so it's hard to keep the bull down. it's not willing to give up any time soon, and the fact of the matter is we knew this season was going to be a little bit weaker so there's not been anything too damaging yet as far as even the forward looking forecast of the company's when they speak. ashley: been impressive. ben willis, thank you so much for joining us, appreciate it. >> my pleasure. tracy: the second largest market for films, china, wielding much more influence on hollywood. maybe too much. dennis kneale has that story. >> tracy, when disney's "iron man 3" opens in the u.s. and china, china is a supporting actor. the chinese version has a local teen idol named fan binge binge who is not in the u.s. film, but loving chinese land scape on the

cutting room floor in the rest of the world. there's 40 communism party centers ensuring that im3 # is tailored to local tastes, less sex, violence, and all the good stuff. guys, gwenyth paltrow is in the film, and culling her shots are just wrong godless communists. there's delayed release of d'jango unchained because of the violence. there's a reason, money. china passed japan as the number two film market, one-fourth of the size of the u.s. and canada, by its revenue grew 36% last year while the u.s. grew just 6%. it's just a matter i have time before china passes us too, building ten new theaters every day, and although they average per capita income is one-tenth of ours, they pay about as much for a ticket as we do as you see

in the chart there. hooray for hollywood. they are doing outfits on new films with hollywood. when the chinese own a stake in evermore new content, they are the biggest counterfeit pirates in the world will carry more without cracking down on piracy everywhere else. tracy? tracy: thank you very much. all right. fewer people smoking, but tobacco profits keep rising. still, will the stocks rise as well? one analyst weighs in next. ashley: as we head to the break, winners and losers, dow trying to get back to the winning ways, and the nasdaq, lots of green there too. we'll be right back. ♪

tracy: tobacco stocks trading near 52-week highs although fewer people spoke. the streets of new york, there's a lot of people smoking; right? what do they have to do to get the bottom line fired up? joining us, those who covers the stock, reporting better chan expected first quarter earnings this morning. tom, thank you for being with us. less people smoke, but they are getting away with raising prices to make up for the difference, don't they? >> hi, tray di, absolutely. tobacco companies have tremendous pricing power, and even though in the most recent quarter, cigarette volumes declined 6%, and declined 2%, and they were able to grow their sales in the lowest single digits. >> let's talk big picture. i mean, we got another tobacco tax on the horizon.

granted, it has to be passedment president obama already raised the tax 62 # # cents back in february of 2009. that's $14 now to buy a pack of cigarettes in new york city, and they want that higher? >> sure. the average varies across the country. the u.s. average for a pack of mar borrows is below $6, and obama as proposal is to raise a pack of cigarettes by 94 cents. there's questions whether or not that happens, but if it did, you can rest assured that the tobacco companies layer pricing on top of that as well as the retailers and wholesalers. what you might see if it comes into fruition is prices go up north of 20%, and volumes downright around 20% as well. tracy: you think it has an effect? tax increases on vices like this don't affect user sheep. >> it could affect volume. people who smoke may smoke fewer

cigarettes, may make people likely to quit, and make them he hesitant to pick up the habit. tracy: or stress out and smoke more. part is there's an e-cigarette division; right? is that where this is going? >> sure, i think the lower line is one of the more attractive tobacco companies out there. the e-cigarette division grew revenues by over 46%. the e-cigarette market is still only roughly 1% the size of the total cigarette market here in the u.s., but it's growing like gang busessers, and in all likelihood, retail sales will exceed $1 billion this year in the united states. the companies looking to raise the rate. >> are you worried about newports menthol fda coming down on menthol, is this a concern going forward? >> it's definitely a risk, but i don't think that the fda has scientific footing for saying that menthol makes people start

smoking to a greater extent or keeps them from quitting smoking. i think they'll find that menthol is just the same as regular traditional tobacco so i think that the newport brand, which is the bulk of sales will continue to be a powerful premium brand. tracy: you like philip morris, both the maker of the marboro. why international interest? >> correct. one reason is they compete in 180 countries, and while some are in declines like the united states is such as those in western europe, there's plenty of countries in emerging parts of asia and europe where per capita consumption is on the upswing, and philip morris has years and years ahead where it grows volumes and pricing in these regions, and the geographic diversity is

topnotch. >> there's other products companies sell too; right? opposed to cigarettes; right? >> correct. many have tobacco alternatives like smokeless products, as well as a wine division and large equity holding of sab miller, the beer company. tracy: right, right, and not to mention stellar dividends on all stocks. thomas, thank you for taking the time. >> thank you, tracy. ashley: liz claman goes through the last hour of trading as we saw millions lost in two minutes following the fake ap tweet. in a fox business exclusive, liz talks to the cme group executive chairman and president about how they handled that event and what he thinks needs to change to prevent it from happening again. "countdown to the closing bell"

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